Krugerrands

Krugerrands, Britannias, American Eagles – which is the best investment?

Deciding to invest in gold bullion coins is one thing. Deciding which coins to buy can be like negotiating your way through a maze of conflicting advice.

There are a multitude of different coins to choose from: South African Krugerrands … American Eagles … Australian Kangaroos … Austrian Philharmonics … Canadian Maple Leafs … Gold Britannias – to name just a few. Almost all first world countries mint their own gold bullion coins. So, how do you decide which to buy, and why one kind might be better than another?

Purity

Some gold coins, like the 1 oz Britannia and Maple Leaf, are 24k gold, while Krugerrands are 22k. So that would make the Krugerrand less valuable, right? Wrong! All 1 oz gold bullion coins contain exactly the same amount of pure gold – one troy ounce. The 22k coins, like the Krugerrand, simply contain small amounts of copper or silver in addition to the gold, to make them harder wearing or more aesthetically pleasing.

This means that all 1 oz gold bullion coins are basically worth the same, since their value is based on the current spot price of gold. Where slight fluctuations in price occur, these are normally the result of supply and demand.

Tax savings

Something else that all gold bullion coins purchased in the UK have in common – you can buy them VAT free, regardless of their country of origin. This does not apply to silver coins, which attract the normal 20% VAT.

But, if you live in the UK, there is one very good reason to choose Britannias or Sovereigns rather than foreign coins: British coins don’t attract Capital Gains Tax, because they are legal tender in Britain. Since buying gold bullion coins should be considered a long term investment, during which you hopefully expect to make a profit, this tax saving should be a major factor in influencing your decision.

Are some gold coins easier to buy and sell?

Provided you stick to the well known coins mentioned above, you shouldn’t experience any trouble buying or selling gold bullion coins in the UK. Shop around for prices, as one dealer may offer better prices than another, based on their current stock.

Globally, the American Eagle gold bullion coin is the most common and widely traded, although for many years the Krugerrand was the darling of investors in gold bullion around the world.

Krugerrands

These coins from the gold fields of Johannesburg, were first minted in 1967 and quickly became one of the most familiar and renowned coins world wide. During apartheid, when many countries imposed sanctions on South Africa, Krugerrands were less readily available, forcing other countries to mint their own gold bullion coins.

American Buffalo

The first 1 ounce American Buffalo Gold Coin produced by the US Mint was struck in 1913, making it one of the oldest gold coins around. As such it has a lot of historic value and is well sought after.

Canadian Maple Leaf

With its delicate design and fine attention to detail, this coin is one of the most attractive gold coins available. Made from 99.99% pure fine gold, these coins have a light diffracting pattern of radial lines which makes them harder to counterfeit.

British Britannia

Another exceptionally safe coin in terms of security features to prevent counterfeiting, the Britannia also contains 99.99% pure fine gold. Struck by the Royal Mint, which has been in operation for over 1 000 years, the gold Britannia has a legal tender value of £100 – although it is worth a lot more than that, around £1 430 at the time of writing. Another advantage of buying these coins in the UK is that you can buy direct from the Royal Mint. Find out more about what makes the Britannia an attractive investment coin here.

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